The encyclopedia · Strategy & Leadership · Strategic decision · 2013–2018
Conviviality hid a £30M tax bill until it was too late — 2,600 jobs, one drinks empire
The owner of Bargain Booze, Wine Rack, Matthew Clark and Bibendum grew by acquisition until a surprise tax liability blew the company apart.
Conviviality · Bargain Booze · Matthew Clark · Bibendum · C&C Group · Bestway · 2018-03
What happened
Conviviality was formed from Bargain Booze, a UK off-licence chain founded in 1975 that had grown to 200+ stores. The company floated on London's AIM market in 2013 and immediately began an acquisition spree. It bought drinks distributor Matthew Clark in 2015 for £50 million, followed by Bibendum, a wine and spirits wholesaler, in 2016. The strategy was to build a vertically integrated drinks business — from wholesale distribution to high-street retail — and it worked for a time. By 2017, Conviviality was supplying 25,000 pubs, restaurants and hotels across the UK.
In March 2018, the company revealed it had a £30 million unpaid tax bill owed to HMRC — its third profit warning in a single month. The disclosure shocked investors, who had not been told about the liability. Conviviality announced it would need to raise £125 million to avoid bankruptcy, but the fundraising attempt failed. Within days, the company's shares were suspended and it announced it would appoint administrators.
The breakup was rapid. Matthew Clark and Bibendum, the wholesale division, were acquired by C&C Group (the Irish drinks company behind Magners and Bulmers) for an undisclosed sum. Bargain Booze and Wine Rack, the retail chain, were sold to wholesaler Bestway for £7 million. The company's head office in Crewe was closed. Around 2,600 jobs were at risk, with hundreds of redundancies confirmed as the retail stores were absorbed into Bestway's existing network.
Why it happened
- Conviviality grew by acquisition, but the due diligence on its targets was shallow — the £30M tax liability was a pre-existing obligation that was either overlooked or hidden.
- The company issued three profit warnings in one month before the tax bill was disclosed, signalling that management was losing control of the business well before the collapse.
- The acquisition spree was debt-funded and left no financial buffer — a single £30M bill was enough to push the company into administration because there was no cash reserve.
- Management did not disclose the HMRC liability to the board or investors until it was too late to raise capital. The market was asked for £125M with no warning and no time.
The lesson
Acquisition-funded growth needs financial due diligence, cash reserves, and honest disclosure. Conviviality had none — a single tax bill destroyed the company.
Aftermath
Conviviality entered administration in March 2018. Matthew Clark and Bibendum were sold to C&C Group, preserving the wholesale business. Bargain Booze and Wine Rack were sold to Bestway for £7 million. The Crewe head office closed. Hundreds of jobs were lost, though the Bargain Booze brand continued under Bestway. CEO Diana Hunter resigned. The case became a cautionary tale about the dangers of acquisition-led growth without adequate financial controls and transparency.
Sources
- The Guardian — Bargain Booze owner Conviviality must raise £125M to halt bankruptcy (2018)
- The Guardian — Bargain Booze owner Conviviality to appoint administrators (2018)
- The Independent — Bargain Booze owner Conviviality reveals shock £30M tax bill (2018)
- Better Wholesaling — Bestway acquires Bargain Booze and Wine Rack; C&C acquires Matthew Clark and Bibendum (2018)
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